359 · Gap Week: What to expect in future episodes of Invest ED

In one sentence: Danielle's short gap-week intro adds Munger's "choose the least bad of your options" idea, then the episode replays the Jim McKelvey interview already covered in 303 (and 259), so only the intro is new.

Key ideas

• Intro (new). From Munger's Daily Journal talk (see 357), Danielle quotes that decisions often mean choosing the least bad option. Munger lists his own holdings (Berkshire, Costco, Chinese stocks via Li Lu, some Daily Journal, apartment houses) and calls it "okay", not perfect. The least bad option can still be an excellent one. [00:00–02:30]
• Why the rerun. She picks the McKelvey interview because it is about deciding without knowing the future, which fits the war in Ukraine and market swings. [02:00–03:00]
• The rerun. It's the Jim McKelvey interview on The Innovation Stack: companies that win by doing 10–20 things differently, a CEO who succeeds because they are prevented from copying, and why most companies should copy what works. See 303 for the full notes. [03:00–52:00]

How it maps to RuleOne

• The "least bad option" idea is the practical side of a margin of safety: you rarely get a perfect choice, so pick the one with the best protection if you're wrong.
• For the rerun's links, see 303.

Buffett, Munger and Graham links

• Munger's "least bad" remark is from the 2022 Daily Journal meeting, as read on air; I haven't checked the wording against a transcript of the meeting.

Words to know

• Innovation stack: a bundle of many different choices that together make a business hard to copy (see 303).

Try this

Take a decision you're facing, such as which of two watch-list stocks to research first. List the downsides of each and choose the least bad downside. Note it in /holdings/.

Check yourself

1. What did Munger mean by choosing "the least bad" option?
   Answer

   Real decisions seldom have a perfect choice; picking the best of imperfect options is acceptable.
2. Which earlier episode has the full McKelvey notes?
   Answer

   303 (a rerun of 259).

Short quotes

"The least bad of your options can be good." (Danielle, ~02:00, auto-transcribed)